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REVIEW OF FINANCIAL ACCOUNTING THEORY AND PRACTICE BALANCE SHEET 1. Pampanga Company’s Company’s December December 31, 200 200 ba!ance ba!ance s"ee# s"ee# repor#e$ repor#e$ #"e %o!!o&'ng %o!!o&'ng c(rren# asse#s) Cas" Acco(n#s rece'*ab!e +n*en#ory Prepa'$ epenses E('pmen# (se$ an$ "e!$ %or resa!e
3,000,000 ,200,000 2,000,000 -00,000 100,000 11,000,000
An ana!ys's o% #"e acco(n#s rece'*ab!e $'sc!ose$ #"a# acco(n#s rece'*ab!e compr'se$ #"e %o!!o&'ng) Tra$e acco(n#s rece'*ab!e A!!o&ance %or $o(b#%(! acco(n#s Se!!'ng pr'ce o% Pampanga Company’s (nso!$ goo$s sen# #o 4 Company on cons'gnmen# a# 125 o% cos# an$ ec!($e$ %rom Pampanga’s en$'ng 'n*en#ory
/,000,000 300,000
1,00,000 ,200,000
A# December December 31, 200, 200, #"e #o#a! c(rren# c(rren# asse#s asse#s s"o(!$ s"o(!$ be a. P10,600,000 c. P10,-00,000 b. P 7,800,000 $. P 7,700,000 2. T"e #r'a! ba!ance ba!ance o% Araya# Araya# Company Company re%!ec#e$ re%!ec#e$ #"e %o!!o&'ng %o!!o&'ng !'ab'!'#y acco(n# ba!ances ba!ances on December 31, 200) Acco(n#s payab!e Bon$s payab!e, $(e 2006 D'sco(n# on bon$s payab!e De%erre$ #a !'ab'!'#y D'*'$en$s payab!e +ncome #a payab!e No#e payab!e, $(e 1919200-
/,000,000 /,000,000 8,000,000 1,000,000 1,00,000 3,000,000 00,000 2,00,000
+n '#s December 31, 200 ba!ance s"ee#, Araya# s"o(!$ repor# c(rren# !'ab'!'#'es a# a. P16,000,000 c. P1-,000,000 b. P1/,00,000 $. P16,00,000 3. Can$a Can$aba ba Compa Company ny &as &as 'ncor 'ncorpor pora#e a#e$ $ on :an( :an(ary ary 1, 200 200,, &'#" &'#" proce procee$ e$s s %rom %rom #"e #"e 'ss(ance o% P1,000,000 'n common s#oc; an$ borro&e$ %(n$s o% P,000,000. D(r'ng #"e %'rs# year o% opera#'ons, re*en(e %rom sa!es an$ cons(!#'ng amo(n#e$ #o P20,000,000, an$ opera#'ng cos#s an$ epenses #o#a!e$ P12,000,000.
,000,000 8,000,000 10,000,000 -,000,000 30,000,000
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Common s#oc; A$$'#'ona! pa'$ 'n cap'#a! >e#a'ne$ earn'ngs 'nc!($'ng appropr'a#e$ %or con#'ngenc'es o% P3,000,000 To#a! e('#y
1,000,000 3,000,000 -,000,000 2,000,000
T"e #ra$'ng sec(r'#'es an$ 'n*en#ory are repor#e$ a# #"e'r cos#s &"'c" appro'ma#e mar;e# *a!(es. +n #"e 200 s#a#emen# o% c"anges 'n e('#y, #"e #o#a! amo(n# o% e('#y a# December 31, 200 's a. P2,000,000 c. P20,000,000 b. P23,000,000 $. P22,000,000
. T"e %o!!o&'ng #r'a! ba!ance o% ?acabebe Company on December 31, 200 "as been a$=(s#e$ ecep# %or 'ncome #a epense. Cas" Acco(n#s rece'*ab!e +n*en#ory Proper#y, p!an# an$ e('pmen# Acco(n#s payab!e an$ accr(e$ !'ab'!'#'es +ncome #a payab!e De%erre$ #a !'ab'!'#y Common s#oc; A$$'#'ona! pa'$ 'n cap'#a! >e#a'ne$ earn'ngs @ 191 Ne#s sa!es an$ o#"er re*en(es Cos#s an$ epenses +ncome #a epense
/,000,000 6,-00,000 11,000,000 17,000,000 -,000,000 /,800,000 1,200,000 10,000,000 /,000,000 ,000,000 80,000,000 6,000,000 6,300,000 112,000,000
112,000,000
D(r'ng #"e year, es#'ma#e$ #a paymen#s o% P1,00,000 &ere c"arge$ #o 'ncome #a epense. T"e c(rren# an$ %(#(re #a ra#e 's 325 on a!! #ypes o% re*en(e. T"e $e%erre$ #a !'ab'!'#y 's (nre!a#e$ an$ &'!! re*erse 'n 2006. 1. T"e a$=(s#e$ re#a'ne$ earn'ngs on December 31, 200 s"o(!$ be a. P1,200,000 c. P20,000,000 b. P13,-00,000 $. P1,000,000 2. T"e #o#a! c(rren# !'ab'!'#'es on December 31, 200 s"o(!$ be a. P10,300,000 c. P11,800,000 b. P11,00,000 $. P13,000,000
6. T"e boo;;eeper %or (ag(a Comp(#ers, +nc., repor#s #"e %o!!o&'ng ba!ance s"ee# amo(n#s as o% :(ne 30, 200. C(rren# asse#s Nonc(rren# asse#s C(rren# !'ab'!'#'es Nonc(rren# !'ab'!'#'es <&ners’ e('#y
P2,//0,00 6,28,00 1,386,000 700,000 6,//0,000
A re*'e& o% acco(n# ba!ances re*ea!s #"e %o!!o&'ng $a#a. a An ana!ys's o% c(rren# asse#s $'sc!oses #"e %o!!o&'ng) Cas" +n*es#men# sec(r'#'es @ #ra$'ng Tra$e acco(n#s rece'*ab!e +n*en#or'es, 'nc!($'ng a$*er#'s'ng s(pp!'es o% P20,000
P /22,00 600,000 68,000 80,000 P2,//0,00
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b Nonc(rren# asse#s 'nc!($e #"e %o!!o&'ng) Proper#y, p!an# an$ e('pmen#) Deprec'a#e$ boo; *a!(e cos# P6,60,000 Depos'# &'#" a s(pp!'er %or merc"an$'se or$ere$ %or A(g(s# $e!'*ery oo$&'!! recor$e$ on #"e boo;s #o cance! !osses 'nc(rre$ by #"e company 'n pr'or years
P,/70,000 21,00 --/,000 P6,28,00
c C(rren# !'ab'!'#'es 'nc!($e #"e %o!!o&'ng) Payro!! payab!e Taes payab!e >en# payab!e Tra$e acco(n#s payab!e To#a! o&e$ #o s(pp!'ers on acco(n# Less) 6mon#" no#e rece'*e$ %rom a s(pp!'er &"o p(rc"ase$ some (se$ e('pmen# on :(ne 27, 200 No#es payab!e
P
-1,00 /1,00 11/,000
P1,01/,000
1,000
777,000 160,000 P1,386,000
$ Nonc(rren# !'ab'!'#'es 'nc!($e #"e %o!!o&'ng) 75 mor#gage on proper#y, p!an#, an$ e('pmen#, payab!e 'n sem'ann(a! 'ns#a!!men# o% P70,000 #"ro(g" #o :(ne 30, 2010
P700,000
e <&ners’ e('#y +nc!($es #"e %o!!o&'ng) Pre%erre$ s#oc;) 170,000 s"ares o(#s#an$'ng P20 par *a!(e Common s#oc;) 1,600,000 s"ares a# P1 s#a#e$ *a!(e A$$'#'ona! pa'$'n cap'#a!
P3,800,000 1,600,000 1,0/0,000 P6,//0,000
% Common s"ares &ere or'g'na!!y 'ss(e$ %or P3,710,000, b(# #"e !osses o% #"e company %or #"e pas# years &ere c"arge$ aga'ns# a$$'#'ona! pa'$'n cap'#a!. QUESTIONS:
De#erm'ne #"e a$=(s#e$ amo(n#s o% #"e %o!!o&'ng) 1. C(rren# asse#s a. P2,/62,000
b. P2,/--,000
c. P2,//0,00
$. P2,/3,00
2. Nonc(rren# asse#s a. P,/70,000 b. P6,60,000
c. P,11,00
$. P6,26/,000
3. C(rren# !'ab'!'#'es a. P1,/01,000
c. P1,81,000
$. P1,/71,000
/. Nonc(rren# !'ab'!'#'es a. P-20,000 b. P700,000
c. P810,000
$. P880,000
. <&ners’ e('#y a. P-,-10,000
c. P8,-0,000
$. P,666,000
b. P1,602,00
b. P6,//0,000
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